The "Middle East and Terrorism" Blog was created in order to supply information about the implication of Arab countries and Iran in terrorism all over the world. Most of the articles in the blog are the result of objective scientific research or articles written by senior journalists.

From the Ethics of the Fathers: "He [Rabbi Tarfon] used to say, it is not incumbent upon you to complete the task, but you are not exempt from undertaking it."

?php
>

Thursday, February 7, 2013

Unconstitutional Recess Appointments Extend beyond NLRB

by John White On
Jan. 4, 2012, while the Senate was in pro-forma session, President
Obama announced that he had the power to declare the Senate in recess.
He then made three "recess appointments" to the NLRB and appointed
Richard Cordray to head the Consumer Financial Protection Bureau (CFPB).

In
the first significant resistance to the concentration of presidential
power, a three-judge panel of the U.S. Court of Appeals in Washington,
D.C. disagreed. The court unanimously said thatthe president exceeded his constitutional power and that the
Senate was not in recess. Further, the panel concluded that the
Constitution allows recess appointments only during the once-yearly
recess between sessions of Congress. The court ruled that
Obama's recess appointments to the National Labor Relations Board are
unconstitutional. Similar CFPB litigation is in the pipeline.

Reuters
notes that "White House spokesman Jay Carney called the ruling 'novel
and unprecedented' and said it contradicted 150 years of practice by
both Democratic and Republican administrations." During his January 25 radio show,
Mark Levin observed that Obama's seizing the power to determine when
Congress is recessed is the truly unprecedented aspect of this case.
Levin is also president of Landmark Legal Foundation, which filed briefs in the case.

The overreach by the president has invalidated a year's worth of NRLB rulings and orders. Resolving those illegal decisions will be disruptive, but this is nothing compared to the turmoil caused by the illegitimate appointment of Richard Cordray.

From its inception two years ago, the CFPB has been a complicated and unusual
bureau. One of the more significant complications is the novel
structure of the CFPB itself. The majority Democrats in Congress placed
the CFPB inside the Federal Reserve in order to frustrate future
changes by Republicans. In no other case has the Congress handed
legislative power to a bureaucracy that is shielded from Congressional
oversight. The result is that the CFPB became both highly politicized
and beyond the control of Congress.

Diane
Katz, a regulatory policy expert from the Heritage Foundation, a
conservative think tank, called the CFPB "one of the most powerful - and
unaccountable - federal agencies ever created" in this week's edition
of Heritage's Backgrounder publication."Basically,
Cordray has a free hand," Katz told ABC News before the announcement
Thursday. "He is not answerable to Congress in terms of the agency's
budget being independent; he doesn't answer to the white house directly;
nor does the Federal Reserve have much authority to intervene in bureau
affairs."

Previous
to the January 4 appointments, the administration was already
exploiting the limits of the statute language by selecting Elizabeth
Warren as the White House "Consumer Czar." Warren's task was to create
the CFPB without the advice and consent of the Senate. The Washington Post reported:

President
Obama announced the appointment Friday of Harvard law professor
Elizabeth Warren to be an assistant to the president and oversee the
creation of a new consumer financial protection bureau.Speaking
at the Rose Garden, Obama called Warren "one of the country's fiercest
advocates for the middle class" and said she will "oversee all aspects
of the bureau's creation" and "play a pivotal role" in picking her
successor. The
decision to name Warren, the first to call for the creation of such a
bureau, to the temporary job has been widely seen as a compromise aimed
at avoiding a potentially bruising Senate confirmation.

Although
Warren's potential nomination as director was controversial even among
some Senate Democrats, as White House "Consumer Czar," Warren was
unrestrained by Senate input while she created the new CFPB.
Operational activation of the agency required Senate confirmation of a
director.

When
he made the Cordray recess appointment, activating the CFPB without
Senate confirmation, President Obama was pushing the very limits of the
CFPB statutory language. Even prior to the president's unilateral
action, senators were already raising questions. The day President
Obama made the unconstitutional appointments Human Events noted:

"The
irony is that while this recess appointment may advance the White
House's political goals, it does nothing to advance the work of the
CFPB," said Sen. Robert J. Portman (R.-Ohio), who represents Cordray's
home state and has reached out to the White House to resolve his stalled
confirmation."The
statute creating the CFPB makes clear that only Senate confirmation of a
director - not a recess appointment - can activate the new powers of
this agency to regulate consumer transactions with Main Street
businesses," he said."Portman
seems to be right on the money, he is right to zero in on what the
letter of the law is," said John Berlau, the director of the Center for
Investors and Entrepreneurs at the Washington-based Competitive
Enterprise Institute."The
unconstitutional process for this appointment compounds the
constitutional defects in the agency," he said. "Obama's appointment of
Cordray may have been too clever by half."

With
the likelihood that Cordray's recess appointment is also
unconstitutional, the status of the agency is murky at best. First, an
unconfirmed czar built the agency. Then the agency began operations and
started rulings with an unconfirmed director. If the court also rules
that Cordray was unconstitutionally appointed director, the CFPB will
have been activated without ever having had a director. Just what parts
of this agency are valid, if any? Answering that question may require
extensive litigation.

The activities of the CFPB have been substantial in the last year. According to ABC News,
"[u]nder Cordray's lead, the CFPB has refunded $425 million to
consumers from big-name credit card companies, including American
Express, Capitol One [sic] and Discover." Given the regulatory
complexities and the question of the legal validity of the agency, the
air badly needs to be cleared.

Going
forward, the administration has two options. First, the administration
may comply with the court's order and remove the unconstitutional
appointees. Alternatively, they may appeal the decision to the Supreme
Court.

The
NLRB's response to this decision has been to say that it disagrees with
the D.C. Circuit, that the "no quorum" finding applies only to the
unfair labor practices case that was before the Court in Noel Canning,
and that it plans to continue on as if the decision never happened.

At least for now, the administration has chosen Option 3: the NLRB intends to ignore the court and continue business as usual.

At
the CFPB, ABC News reports, "[f]our days into his second term,
President Obama renewed a fight from his first term when he renominated
Richard Cordray for head of the Consumer Financial Protection Bureau."

Given
the legal questions and litigation surrounding the bureau, Senate
confirmation of Cordray or any other director would only compound the
problems with the agency. The Senate might be well advised to consider
the outcome of litigation prior to becoming embroiled in the turmoil.

The
CFPB has been an ongoing political lightning rod, resulting from its
clash with the Constitution and other federal policy. Two different
news articles illustrate that clash. First, Investors Business Daily discusses the Community Reinvestment Act.

A
recent study by the National Bureau of Economic Research, the nation's
pre-eminent economic research group, states that the CRA "clearly" had a
major impact on the flood of subprime loans made in the late 1990s and
2000s, which directly led to the housing crisis.By
quietly expanding the regulation, analysts say President Obama is
picking up where President Clinton left off in April 1995, when he
rewrote rules for what had been a largely toothless law as first drafted
in 1977.[snip]The
new rules for the first time mandated that banks use "innovative" or
"flexible underwriting practices." Compliance required banks to pass a
heavily weighted "lending test" or suffer holds on expansion plans.The
CRA overhaul "has been a disaster," said ex-BB&T CEO John Allison
in his recent book on the financial crisis. He argued it's forced "banks
to participate in making high-risk housing loans to low-income buyers
who would not meet traditional bank lending standards."[snip]Still,
the Obama administration wants banks to step up approval of such
low-income mortgages. And it's using the CRA to spur more lending[.]

In other words, the CRA requires banks to make new risky loans to low-income buyers. Meanwhile, the CFPB has a different set of goals:

The
Consumer Financial Protection Bureau (CFPB) announced its new rule to
protect home borrowers from irresponsible mortgage lending by requiring
lenders to ensure prospective home buyers have the ability-to-repay
their mortgage. Home Destination, a Minneapolis Realtor with RE/MAX
Results, comments on how home buyers benefit from the rule.

Home
Destination's owner Jenna Thuening puts it simply: "The CFPB released
mortgage standards aim to help stop home foreclosures due to the type of
risky lending that caused the housing market crisis. "The rule defining
a 'qualified mortgage' really means one a borrower can actually be
expected to pay back, while eliminating questionable loans that
stretched homeowners to the capacity that many faced foreclosure and
couldn't stay in their homes."

Clearly,
the CFPB is writing rules that prohibit the very type of risky home
loans that the CRA is promoting. Isn't it interesting that the CFPB's
"risky loans" are the CRA's "innovative" and "flexible underwriting
practices"?

When
faced by conflicting and mutually exclusive regulations, banks will be
forced to abandon home mortgage lending -- a typical result when the
right hand of government doesn't know what the left is doing.

John WhiteSource: http://www.americanthinker.com/2013/02/unconstitutional_recess_appointments_extend_beyond_nlrb.html